The rupee resumed higher at 61.57 per dollar against the previous close of 61.59 and dropped immediately to 61.70 on initial dollar demand from banks and importers.

After moving in a range of 61.35 to 61.70, it ended at 61.46 a dollar, a gain of 13 paise or 0.21 per cent. The local currency is at the highest level since closing at 61.27 on October 18.

"Foreign institutional investors are seen showing interest in the Indian markets. Globally, the US dollar was seen continuing with its weakness amid concerns that the ongoing pace of QE (quantitative easing)

will remain in place in the current year," said Abhishek Goenka, CEO of India Forex Advisors.